UL10: Green Financing

Ten projects take advantage of financial tools that promote environmentally positive development

With global temperatures rising, and more national, state, and local governments requiring property owners to meet energy efficiency standards, developers are increasingly turning to green financing strategies. These tools—which include green bonds, green construction loans, Commercial Property Assessed Clean Energy (C-PACE) financing, and state-sponsored programs to promote energy efficiency—help developers broaden the range of equity and debt sources to tap into while making it easier to cut carbon emissions and energy costs.

The following 10 projects—all completed during the past five years—encompass residential high-rises overlooking Lake Michigan, the redevelopment of New York City’s Penn Station, a senior living facility in Simi Valley, a heavy timber office building in Denver’s River North neighborhood, and a boutique hotel in downtown Los Angeles.

1. 1950 and 2000 Opportunity Way
Reston, Virginia

Standing across the street from a Metro station, the first phase of Boston-based BXP’s expansion of the 1990s Reston Town Center consists of two office towers atop a shared podium with shops and restaurants. Duda|Paine Architects of Durham, North Carolina, organized the towers around a landscaped central courtyard and linked them with a connecting floor that contains such amenities as dining, fitness, and gathering spaces. The bridging floor also sports a rooftop terrace. A kinetic art wall fitted with mirrored discs screens from view part of the six-story parking structure.

Seventy percent of the total project costs were funded by BXP’s green bond offerings. Sustainability strategies here reduce water use by 40 percent and electricity use by 30 percent, compared to a baseline building. Completed in 2021, the project contributed to a LEED v4 Neighborhood Development Gold certification. The complex includes infrastructure for as many as 300 future electric vehicle charging stations. The 22-acre (9 ha) site is intended to eventually include up to nine new buildings and seven acres (3 ha) of parks.

2. CIBC Square
Toronto, Ontario, Canada

Codeveloped by the local office of Hines and Montreal-based Ivanhoé Cambridge, CIBC Square is a 3 million-square-foot (280,000 sq m), two-tower office complex in downtown Toronto. The first phase, a 49-story tower completed in 2021, consists of 1.5 million square feet (140,000 sq m) of office space and amenity areas. A syndicate of lenders led by Canadian Imperial Bank of Commerce provided a Canadian $780 million (US$642 million) green construction loan to finance the second phase of construction, scheduled for completion in 2025.

CIBC Square achieved LEED Platinum certification and WELL Platinum certification. The folded façade’s high-performance glazing lets in plenty of daylight, reducing the need for artificial lighting. The complex connects directly to the city’s underground pedestrian walkway network and Union Station, and also offers 500-plus bicycle racks and shower facilities to encourage alternative forms of commuting. Rainwater and groundwater systems capture, filter, and sanitize water for use in washrooms. WilkinsonEyre Architects of London is the design architect, and local firm Adamson Associates Architects is the executive architect.

3. CitizenM Los Angeles Downtown
Los Angeles, California

When the COVID-19 pandemic struck in 2020 and incapacitated the travel sector, traditional capital sources for hospitality development dried up. In response, many hospitality developers have turned to C-PACE financing to fill the gap. Case in point: Amsterdam-based CitizenM and local developer BLVD Hospitality drew on a $42 million C-PACE loan to help create CitizenM Los Angeles, a 315-room hotel that opened in downtown LA in 2021.

Its sustainability strategies include a 100 percent fresh air supply and heat pumps to provide heating and cooling; occupancy sensors to minimize energy use in break rooms, corridors, meeting rooms, and restrooms; and a central dashboard that enables staff members to monitor and adjust room temperature in unoccupied guest rooms. In addition, all guest rooms were manufactured as modules in a factory, which allowed for airtight, well-insulated spaces and a significant reduction in construction waste. Amsterdam-based design firm Concrete designed the hotel in collaboration with the local office of Gensler.

4. Holly Spring Meadows Apartments
Prince George’s County, Maryland

Dating back to the 1960s, Holly Spring Meadows Apartments contains 224 units that range from one bedroom to three. To help make the community more energy- and resource-efficient, the owner, FCP of Chevy Chase, Maryland, applied to the Maryland Department of Housing and Community Development’s Multifamily Energy Efficiency and Housing Affordability (MEEHA) program, which provides funding for multifamily developments in which at least 20 percent of households have incomes of 80 percent of area median income or less.

The funds enabled FCP to carry out an LED lighting retrofit, make mechanical upgrades, and install low-flow water fixtures such as aerators and showerheads. FCP subsequently applied for—and received—MEEHA funding for other existing properties in its portfolio.

5. Lakeshore East
Chicago, Illinois

Lendlease—headquartered in Barangaroo, New South Wales, Australia—partnered with local residential developer Magellan Development Group to put three high-rises on four acres (1.6 ha) at the nexus of the Chicago River and Lake Michigan. The first two towers, dubbed Cascade and Cirrus, opened in 2021 and 2022, respectively, the first containing apartments, the second condominiums. Both received LEED Gold certification, and both received funds from Lendlease’s green bond. In addition, the project is part of a joint venture fund with Aware Super, a superannuation fund headquartered in Sydney, New South Wales, Australia, which requires that assets be net neutrally operating across Scopes 1 and 2 emissions.

Designed by the local office of bKL Architecture, the buildings reduce the heat island effect with green roofs growing flowers and vegetables. The development includes Cascade Park, which provides public open space and native landscaping. With a high-performance building envelope, regenerative drive elevators, high-efficiency LED lighting technology, and energy-efficient temperature controls, both buildings are designed to achieve a 38 percent reduction in energy use compared to conventional counterparts.

6. Penn 2
New York City, New York

Local developer Vornado Realty Trust used a green bond, issued in 2021, to power its transformation of the 1960s-era Penn Station complex in Midtown Manhattan. Located directly above the station, the Penn 2 tower contains 1.8 million square feet (170,000 sq m) of office space and received $141.3 million from the green bond. Local firm MdeAS fitted the building with a new triple-glazed curtain wall, which lets in expansive daylight and reduces total building energy consumption by six percent. High levels of thermal insulation allowed downsizing of the mechanical, electrical, and plumbing systems, enabling the existing induction units and high-pressure riser to be replaced with a low-profile fan coil unit.

Vornado’s tenant improvement package also offers occupancy controls, daylight-responsive lighting, receptacle controls, data closet cooling systems, and smart thermostats. In total, the renovation resulted in a 28 percent increase in energy efficiency. Completed at the end of 2023, Penn 2 has extensive outdoor tenant space, including a rooftop park and multiple terraces.

7. T3 RiNo
Denver, Colorado

T3 RiNo, a six-story, 235,000-square-foot office (22,000 sq m) building in Denver’s River North Art District (RiNo), received a $91 million green construction loan to help finance its sustainability strategies. The T3 stands for “timber,” “transit,” and “technology.” The heavy timber structure references the city’s historic brick and timber buildings, and is estimated to sequester 6,400 metric tons of carbon dioxide. Located a five-minute walk from the 38th & Blake Rail Station, the building includes secure storage for up to 100 bicycles and is walkable to 3,000 apartment units nearby.

The building meets Energy Star performance standards and has a robust internet infrastructure, technologies for optimizing indoor air quality, and electrical capacity to accommodate all-electric boilers and heat pumps in the future. Codeveloped by Houston-based Hines, Montreal-based Ivanhoé Cambridge, and the local office of McCaffrey; and designed by the local office of DLR Group and Pickard Chilton of New Haven, Connecticut, T3 RiNo was completed at the end of 2023.

8. The Trove
Arlington, Virginia

On what was once a surface parking lot for the Wellington—a 711-unit apartment building, dating from the 1960s, along the Columbia Pike—Elme Communities of Washington, D.C., added the Trove, 401 apartments in three seven-story buildings. The infill development received funding from Elme’s 2020 green bond offering. Close to multiple bus lines, the Trove includes electric vehicle charging stations, preferred parking spaces for fuel-efficient vehicles, 160 secured bike storage spaces, access to multiple bus lines, and shuttle service to the nearby Metro station. Two of the new apartment buildings wrap around 10 levels of structured parking, which is capped by a rooftop deck. A central courtyard terrace at the main level provides additional outdoor space for residents.

Designed by KGD Architecture of Washington, D.C. and completed in 2020, the Trove earned LEED BD+C Silver certification with its sustainability strategies, which include energy-efficient heating, ventilation, and air-conditioning systems; water-efficient plumbing fixtures; and bioretention systems for stormwater management. Ninety-two percent of construction waste was recycled or reused to divert it from landfills.

9. Varenita Simi Valley
Simi Valley, California

Griffin Living of Calabasas, California, turned to Bayview PACE of Coral Gables, Florida, to refinance a new assisted living and memory care development in Simi Valley. Bayview PACE structured a retroactive C-PACE loan that provided $13 million in C-PACE–eligible costs, as well as cash-out equity and pay-down of the existing bridge loan.

C-PACE–eligible expenses for Varenita included electrical, plumbing, and mechanical systems; elevators; windows; insulation; waterproofing; the roof; and exterior doors, as well as structural components of the foundation and walls. Designed by Irwin Partners Architects of Costa Mesa, California, the 97,000-square-foot (9,000 sq m) facility opened in 2022 with 75 assisted living units and 27 memory care units. Located in the Griffin Plaza shopping center, Varenita gives residents easy access to stores and restaurants.

10. The Witmer at Pentagon Centre
Arlington, Virginia

Kimco Realty of Jericho, New York, is revamping the Pentagon Centre retail complex into a high-density, mixed-use community directly above the Pentagon City Metro station. The first phase, completed in 2019 and dubbed the Witmer at Pentagon Centre, is a 26-story residential tower that includes 440 apartments, 11,400 square feet (1,000 sq m) of ground-floor retail, a six-story parking structure, and a landscaped urban plaza. The project drew on $64.2 million in proceeds from Kimco’s $500 million green bond, issued in 2020, which provided 55 percent of the project cost.

Designed by local architecture firm WDG, the Witmer received LEED Silver certification and is targeted to achieve a 25 percent annual energy cost savings compared to the industry baseline, with an estimated 11 percent reduction in carbon emissions and 65 percent reduction in irrigation water. Clad in glass panels and geometrical precast vertical pillars, the Witmer conceals its parking structure behind pleated metal screen walls, washed with programmable LED lighting at night. The rooftop terrace offers panoramic views of Arlington and the monuments of Washington, D.C.